As the inauguration of a new president gets into full swing, I think about something President-elect Barack Obama said during his campaign that probably won’t make the history books and may even perhaps get lost in years of records of his riveting oration.

He said “We’ve been living beyond our means and we're going to have to make some adjustments."

The hardest part will be adjusting our minds. So much of how we spend, how we feel, what we use our money for and the lengths to which we will go to feel a high when we have no money is all a matter of perception. The more grateful you are for your station and the less you want, generally the better off you are.

This is illustrated plainly in the story of Christopher Greenslate and Kerri Leonard, a couple who are both high school social studies teachers and decided they’d live on a dollar per day as an experiment. Mind you, in America, living on a dollar a day is impossible but they did it by buying corn meal and oats, making their own bread and other third-world confections. Soon they realized that they spent just as much time as they saved money and ended up donating money they made from blogging about the impossible feat. It was kind of like “whew glad we don’t live in Kenya.”

But it was an exercise with meaning for them and they got the word out and elicited some thought.One to grow on here. Being frugal is a luxury you can afford when you ease up on, well luxuries.

While there is nothing more demoralizing than watching nearly your whole check go toward bills, it’s also an opportunity to look at why this is happening and change your life.

And before cats get at me on the comments section wondering what the relevance of this post is, know that I’ve been broke as well as poor and I’m speaking from experience. Breaking habits and not counting pennies is the first step.

Let me break it down for you real quick. When you’re middle-class and you’ve screwed yourself up in the game money wise, you learn fast that from a relativity stand point, being broke is actually worse than being poor - at least in your spoiled mind - and you learn the subtle differences.

When you’re poor, you might go to the local tienda, convenience store, 99 cents store or what have you and get two weeks worth of corn meal, some taco mix and a gang of beef and or meat of some kind, maybe some rice, a big can of beans. You eat what you eat, you eat what you can, you listen to the radio, watch pirated TV, just sit outside and people watch, you drink malt-liquor, a trip to faded land that costs less than $2.

In short, you dance or Kool-Aid your travails away. You’re poor, you know no difference, you know no better and you often don’t know where your next meal is coming from. Broke is: ‘Naw can’t go to the club this week,’ gotta catch you later. Poor is: Man, I can’t feed my family. This is why we must understand fundamentally while some of our exercises in saving go for naught and why when things turn around, we forget our lessons.

Unfortunately in America just eat one bite from the tree of knowledge, just one trip out of town, just one spending spree, just one feel of fine fabric, one morsel of Kobe steak can actually program your hard drive in a way that’s hard to undo.Sit in a restaurant with no television once in a while you can easily graduate into the purgatory of being broke because you’re constantly fulfilling wants and then find that your needs still aren’t being met.

It’s the classic carrot on a stick that is the American dream. It’s where most of us live, the check-to-check middle class, striving for the luxuries in between commutes, watching premium channels, paying bills for ancillary items that are of no necessity whatsoever. But then you get stuck in your purchased identity as your cost of living rises with your standard of living.

One can certainly go from Ground Chuck to Filet Mignon but it’s hard, if not impossible to go back, not back for a week or two but habitually back, back through the portal of simpler times, when money or the lack thereof didn’t rule the day.

For those of you who are Horatio Alger or just went from ashy to classy or became the first in your family to graduate college, I think now is the time to get back to basics and more important, figure out what your basics are.

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Funkright #1

Getting back to your "base" level or point is where many of us need to visit. Sometimes we chose to go back there & sometimes we are forced there, it's where we all need to go, so that we can recalibrate.

The fact that Obama said that "we've been living beyond our means" is pretty incontrovertible, but also clear is the fact that he has not even the slightest motivation to actually stop living beyond 'our' means. How dare he chastise the consumer for spending on frivolities when he plans of burning billions if not trillions of our money on government pork.

He is right when he says it is going to get worse before it gets better, but he has not even an inkling of rational thought on why.

It's ironic that a person who is for giving 700 billion dollars no questions asked to the banking industry, is lecturing ME on living beyond my means. The government is great for taking money from the taxpayers for their retirement years then spending it profligerately on anything they feel like(even though that money was meant to go for a particular purpose) and then hollering about how we all have to tighten our belts.

Luxuries? You must mean stuff like health care or affordable housing in your locality, or schooling? Nowadays thats what I hear people worrying about affording, not premium paid channels on TV.

"I went from ashy to classy"....one of my favorite quotes from Notorious B.I.G.lol.

Guest #5

Mahalo (thank you) once again for a thought provoking post. We live simply so others can simply live. I think of that saying everytime we volunteer and/or donate money and goods. We have never bought into that "moving on up" philosophy, so we've never had to move on down. It's worked for us for over thirty years.

Thanks for your post. A dollar a day, something to consider.
Contentment goes a long way towards "recalibration" (good word choice in an earlier comment). Expectations and impatience kill clear thinking. That goes for individuals and governments. It is hard going "back". But then you realize the stuff you thought was so vital, really isn't worth the extra expense. Diminishing returns. A steak eaten out isn't twenty times better than a great burger with cooked onions made at home. Or lentil curry, or well made rice and beans.

The reason that bills end up with "pork" is because our state governments use the their power as leverage. Congressman John Doe from state A won't sign the bill unless they include money for a theme park in his home state etc. The point of the bailout in october was to take quick action, and unfortunately that meant allowing the pork.

I'm more angry that our state governments do this on a regular basis, since it essentially amounts to taxing us for things we don't even get the chance to vote on.

Being content with what you have is the key to not being broke or poor. Those are just descriptive terms. Contentment is Not something our money driven society espouses. Dissatisfaction seems the norm. Stop looking and listening to all the voices that say what you should want, need or have and be content. It is surely a better way.

Good article. I find that it's easier to not want or expect fancy/expensive stuff because I don't watch TV and read consumer style magazines. Avoiding all those advertisements really helps unclutter my mind. I don't care about brands and styles any more. We live below our means, which are below average, and don't feel deprived. We are still 'spoiled' compared to those in developing countries.

Jan's comment says it well. If we're contented, then we don't feel the need to keep consuming more. Advertisers try to make us discontented with the status quo, so that we will buy what they tell us.

It takes a bit of rebellion to be content with what you have. Your bucking a constant stream of marketing telling you otherwise right down to who you are and your worth. Many people don't realize how involved marketing is even down to being in the news. Your also bucking the other people who are still fully invested in these marketing ideas of worth and constant dissatisfaction trying to apply that standard to you. It takes a concentrated effort to do and you have to see the marketing for what it is.

I moved from the suburbs of Ohio (the only "city" near a lot of farm country) to LA-area. The things I've been exposed to out here are nothing like had I stayed in Ohio. The other day I mentioned to my boyfriend that when my current car died, I was thinking about getting a BMW. He stared at me in amazement and said, "you'd never had said that if you still lived in Ohio."

Before I moved to Cali, I never owned designer jeans, considered a designer purse, or really cared about appearances at all. Still no designer purse, but I do have the jeans. It's hard to maintain my midwestern values when I've become used to this kind of life. Moving back to Ohio will be a shock.

Clarification: You say those teachers were "living on" a dollar a day, but that number really only pertained to food, right? Utilities, etc, were not factored in? (The challenge still sounds unimaginably difficult, but I just wanted to make it clear that the dollar a day challenge applied only to food.)

Yes, it was 1 dollar per day for food alone. Utilities, rent, and other costs were not included; you are correct. They showed the sheer impossibility of living under that financial restriction. Churches and aid workers fill in this gap in the 3rd world, as many people send their kids to the free schools and stand in line for donated grain, tools, and medicine. The reality of the situation is very, very grim.

Definitely a difference. I've been poor, and actually it's easier because I had more time on my hands. Life was much more relaxing. Not that I want to go back to being poor, I just wish I could figure out how to get back some time.

Great post. While I'm not sure that using Obama as the example is the best way to illustrate your point, I do *agree* with your point.

The average American is really, really spoiled. I have many regular customers who're telling me they've just had their hours cut back (or worse, been laid off), but they're still out there bar-hopping. Not the greatest use of one's diminishing funds (though my income appreciates their irresponsibility). My co-workers routinely tell me about how behind they are on rent and/or utilities (I work at a bar), but they tell me this as they show me new outfits.

I think the two biggest problems are:

1) Lack of ability to prioritise and budget
2) Credit cards

My boyfriend and I have a no credit card policy, we live well below our means (as full-time college students, our combined income is just under 20k/yr) and always have money saved for rainy days. This is really helpful, because during slower money months, I'm NOT worried about how my electric bill is getting paid. I'm not out there spending money, so if my income isn't high enough to cover things (hasn't happened yet, but it's come close recently), I've still got savings to fall back on. Because we don't have credit cards, going out and buying random stuff we don't need is not an option. If we want a big purchase, we have to plan and save for it. We also can't snowball our bills onto credit cards, which makes it even more difficult for the people who do this to get back on top of things, let alone ahead.

The story that comes to mind is the classic one of the princess and the pea who could not be comfortable on a mountain of mattress due to one pea in there somewhere. In contemporary society it seems that that finicky idea of being "discriminating" and only demanding the best "because you are worth it" has created consumption monsters. Who "needs" thousand dollar purses for most of life's experiences? Not a middleclass American! But they have talked themselves into the princess syndrome and bitch and whine if they are "deprived." Or boast about their costly collection of designer handbags as if that gave endowed them with some special something. Bitching has almost become a virtue which is construed as coming from your delicate sensibilities! Those folks have needed to come down a peg for a long time and sadly, the economic collapse is their downward trajectory and not a pleasant one, either. Yes, many of us are spoiled and darn near deluded! This, hopefully, will clear up quickly.

I have had more time than money, and made everything stretch as far as I could. I have had money and no time, and paid for convenience. I have no trouble going back to not much money because I was raised to value and save. I have lived in my 1,000 sq. ft. house and raised two children while developments sprung up around us. My children know that money is a tool, not an end to itself. We stay warm, and eat healthy and sleep well because we never bought into the fantasy.

I am glad that someone is finally willing to stand up and say enough, but I also heard today that the cost of this inauguration is triple the amount that 8 years ago was considered sinful. I guess the hangover comes the day after?

My wife and I actually went to live in a third world country to try to live a simpler life. After almost a year, we felt we could not wait to come back to the US. We were able to change our perspective in life and made drastic changes to our lifestyle. However, the important lesson we learned is that we can do the same thing here. The grass is (most of the time) not greener on the other side. We were able to adjust to living a simple life while we were in overseas but the threat of dangers from kidnappers, armed robbers, corrupt government and law enforcement, heavy pollution, opportunistic relatives and chaotic environment is just too much to deal with. Sometimes I hear people want to retire and live overseas thinking they will be able to live a simple life on a few cents per day. I recommend they live in the country of their choice for at least six months before they make their final decision.

Good article! I enjoyed it very much, in part for the language, and in part because what it says is so true. It's difficult to shift down the class ladder and be happy about it because you've seen the view from up high!

One solution I've found in my own financial ups-and-downs is ask "What is real?" Cable TV? Not real. Without money, they'll disconnect it. Without power, you can't watch it. And a lot of what the portray as true on TV is just flat out wrong (like CSI's depiction of DNA and fingerprint evidence). If you think about it this way, that going without cable is doing without something that's not real anyway, then it hurts less. And it makes it easier to appreciate the real things in life: a good breakfast, a walk in the sun, the birds visiting in your yard, your friends, your family. These real things are in a real way better, cheaper, and more honest, because they stay with you when the money's gone.